Transnet issues RFP for LeaseCo PPP to modernise rail rolling stock and expand private sector participation in South Africa
Transnet has issued a formal Request for Proposals (RFP) to two shortlisted bidders as part of its plan to establish a rail rolling stock leasing entity known as LeaseCo, structured as a public–private partnership (PPP).
The bidders were selected from 14 respondents who participated in an earlier Request for Qualification (RFQ) process launched in April.
The identities of the shortlisted bidders have not been disclosed. Transnet confirmed only that they emerged from the initial RFQ evaluation process as the most suitable candidates to proceed to the next stage of the transaction.
LeaseCo is intended to function as a dedicated entity responsible for the acquisition, management, and leasing of rolling stock to both domestic and regional markets.
The initiative forms part of a broader private sector participation programme involving Transnet Engineering, with the goal of improving operational efficiency and unlocking new investment in South Africa’s rail sector.
According to Transnet, the private sector partner will hold a majority stake and will be expected to contribute capital investment, technical expertise, and operational capability.
These inputs are intended to support the revitalisation, expansion, and improved management of the national rolling stock fleet.
Following the closure of the bid submission process in December, Transnet will appoint a dedicated evaluation team to assess the proposals received.
The preferred bidder will then undergo a detailed due diligence process before entering into final negotiations with Transnet.
The company expects the process to continue for approximately 12 months before reaching financial close.
Transnet has already begun allocating rolling stock assets for leasing in response to growing demand from private train operating companies (TOCs).
In May, the company confirmed that leasing agreements had been signed with five of the 11 TOCs that hold rail access agreements issued by the Transnet Rail Infrastructure Manager (TRIM).
These existing contracts are expected to be transferred to LeaseCo once the entity is formally established.
Transnet has stated that LeaseCo will operate as a commercially viable and independently governed leasing business.
As part of the structure, Transnet will contribute a ring-fenced portfolio of rolling stock assets as equity, alongside capabilities from Transnet Engineering, including original equipment manufacturer (OEM) support.
Previous reports indicate that approximately 500 locomotives and around 17,000 wagons are expected to be transferred into LeaseCo.
The entity will ultimately be established as a special purpose vehicle (SPV) once the preferred bidder is appointed and financial close is achieved.
While no fixed timeline has been confirmed for the final selection of the private partner or the creation of the SPV, Transnet leadership has described the initiative as a key reform aimed at modernising South Africa’s rail system and improving freight logistics performance.
Transnet Group CEO Michelle Phillips said LeaseCo represents a transformative opportunity to attract private capital, improve rail reliability, and strengthen freight capacity.
She added that strong demand from train operating companies positions the initiative as a compelling investment opportunity for potential partners.
